How does financing work with credit cards? Walmart Store card specifically

[Anonymous]

Say I have a $500 limit Walmart store card

I want to buy a TV that's $500. 0% interest for 12-months.

Now I noticed my minimum payment is $20.

If I buy the TV and finance it. Do I pay $20 minimum for do I have to pay $42 minimum cause of the tv financing and it saying minimum payment is needed.

I can afford to pay the tv in full with cash but I'm new to credit. Oldest card is one year one month (Cap1) I have a Walmart card that doesn't show activity and was curious about the financing aspect of cards.

[Anonymous]

First of all, my personal rule is to never do a 0% card balance deal unless you have at least 3-6 months of minimum payments socked away.  If you don't, you probably can't afford the item you're thinking about and it can get you into trouble later if you don't pay it off in the time frame allotted for 0% interest.

Secondly, doing the 0% interest usually means not earning any rewards on that purchase.  Keep that in mind because the rewards typically are pretty good so maybe saving up for 6 months means you'll save cash then.

The terms of the Walmart Sync card are here to read: https://www.synchronybankterms.com/gecrbterms/pdf/WalmartCreditCard.pdf   Search for "promotional" in that PDF for exact terms.

From what I read of that PDF, it says as long as you pay off the entire promotional balance before the period expires, it won't charge deferred interest.  This means you can make minimum payments, or full payments, or anything in between as long as ALL those payments equal the promotional charges before the deadline.

One big red flag to me reading that PDF is this line: Some or all of the minimum payment based on the promotional balance may be applied to other account balances. What they're saying is if you use the card for a 0% offer but then continue to use the card for other purchases, some of your MINIMUM payment might go to the promotional balance and some of it may go to other charges.  I would NOT do a 0% offer without making sure you can beat down that promotional balance in the right timeframe.  This is how they "get" people to pay a lot of interest without realizing it.

[mkhan1093]

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@Anonymous wrote:
Say I have a $500 limit Walmart store card

I want to buy a TV that's $500. 0% interest for 12-months.

Now I noticed my minimum payment is $20.

If I buy the TV and finance it. Do I pay $20 minimum for do I have to pay $42 minimum cause of the tv financing and it saying minimum payment is needed.

I can afford to pay the tv in full with cash but I'm new to credit. Oldest card is one year one month (Cap1) I have a Walmart card that doesn't show activity and was curious about the financing aspect of cards.

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The minimum payment is just their way of making sure you are gradually giving back to them. It has nothing to do with the fact that this is a promotional balance, and I highly recommend you ignore the minimum payment. You'll have a negative mark on your credit report if you pay less than minimum, but you'll end up in a lot of debt if you only pay the minimum. They're not telling you how they expect you to pay it back, as long as you pay back 500 in 12 months. When I have promotional offers, I do an autopay every month for the average montly price, i.e. in your case $500/12 = $41.67. But you don't have to do it that way if you don't want to. Just make sure you set a calendar alert or something after 10 or 11 months so you know what your situation is and you don't get charged interest.

[Anonymous]

I can afford the tv in cash I have savings etc. I just wanted to know how the minimum works. I didn't want to hear about avoiding it and the cons. But thank you for the replies.

[mkhan1093]

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@Anonymous wrote:
I can afford the tv in cash I have savings etc. I just wanted to know how the minimum works. I didn't want to hear about avoiding it and the cons. But thank you for the replies.

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If you wouldn't really benefit from the promotional period then I'd say just charge it to your card and pay it off in full then. You'll at least get cashback or rewards points that way.

[EAJuggalo]

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@mkhan1093 wrote:

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@Anonymous wrote:
I can afford the tv in cash I have savings etc. I just wanted to know how the minimum works. I didn't want to hear about avoiding it and the cons. But thank you for the replies.

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If you wouldn't really benefit from the promotional period then I'd say just charge it to your card and pay it off in full then. You'll at least get cashback or rewards points that way.

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This.  All using the financing is going to do is show a utilization percentage every month.  If you put the TV on your card and pay it off next week you'll get 1% cash back as a statement credit, 3% if you buy it through walmart.com.  So would you rather have the 0% interest on it for  a year or have them pay you $15 to buy that tv from them.

[Anonymous]

If you have the cash to pay it off today, do so.  No one can predict tomorrow.